Two individuals have admitted their respective roles in a multimillion-dollar compounded medication kickback scheme that they and others ran out of a pharmacy in Clifton, New Jersey, U.S. Attorney Philip R. Sellinger announced.
Jeffrey Andrews, 73, pleaded guilty on September 24, 2024, before U.S. District Judge Madeline Cox Arleo in Newark federal court to one count of an indictment charging him with conspiracy to violate the Anti-Kickback Statute.
Adam Brosius, 59, pleaded guilty before U.S. Magistrate Judge Michael A. Hammer in Newark federal court on September 23, 2024, to two counts of an indictment charging him with conspiracy to commit health care fraud and conspiracy to violate the Anti-Kickback Statute.
According to documents filed in this case and statements made in court:
From 2014 through 2016, Andrews, Brosius and others used Main Avenue Pharmacy, a mail-order pharmacy with a storefront in Clifton, New Jersey, to run an illegal kickback scheme involving compounded drugs, including scar creams, pain creams, migraine medication, and vitamins. Andrews worked as the Chief Financial Officer for Main Avenue. Brosius worked as Main Avenue’s director of business development and later as its president.
The scheme identified compounded drugs that would yield exorbitant reimbursements from health insurers, including federal and commercial payers. Once Main Avenue identified lucrative formulas for compounds, it would create large prescription pads with those formulas on them and distribute the pads to marketers across the country with whom it had contractual relationships.
The marketing companies would, in turn, distribute the prescription pad to telemedicine companies and doctors with whom they had a financial arrangement.
After filling prescriptions, Main Avenue submitted reimbursement claims to health care benefit programs, including Medicare, Tricare, and commercial payers in New Jersey and elsewhere. After Main Avenue obtained reimbursement, it paid kickbacks to marketers who had generated the prescriptions.Â
Main Avenue signed contracts with many marketers, which detailed the illicit kickback arrangement, which called for Main Avenue to pay each marketer money based on the volume of referrals of compounded prescriptions and the reimbursement amount that Main Avenue received. Main Avenue received approximately $33 million in reimbursements for compounded medications from health care benefit programs alone. Over $5.8 million of that amount was paid by TRICARE, a federal payer.
The count of conspiracy to commit health care fraud is punishable by a maximum penalty of 10 years in prison. The count of conspiracy to violate the Anti-Kickback Statute is punishable by a maximum penalty of five years in prison. Both counts are punishable by a fine of $250,000 or twice the gross gain or loss from the offence, whichever is greatest. Sentencing is scheduled for Brosius is scheduled for February 20, 2025, and for Andrews February 18, 2025.
Charges remain pending against Chad Beene, 52, of Philadelphia, Pennsylvania. The charges and allegations against Beene are merely accusations, and he is presumed innocent unless and until proven guilty. Robert Schneiderman, 81, of Langhorne, Pennsylvania, previously pleaded guilty to two counts of the Indictment.
